Richard Russell: "Don't Sell Your Gold or Gold Shares"

Peter Brimelow mentions Richard Russell of Dow Theory Letters in his new MarketWatch column. Russell says flatly:

"Do not trade your gold or gold shares. The third phase for gold lies ahead. The central banks do not want to see a new high in the price of gold, and they will do anything they can to keep the price of gold down. But the primary trend of gold is more powerful than all the world's central banks taken together."

"There is nothing more powerful than an idea whose time has come. The idea -- gold is the only money that's safe from the world's clueless governments, and their obsession to escape a recession or a depression."

I certainly think the recent move up in gold has to do with lack of faith in paper money. Specifically, paper money backed by thin air.

I hope you caught Mark Faber on Pimm Fox's Bloomberg TV show earlier this week. He said in the short run he's not betting against central banks -- but that in 10 years or so they'll be toast ("toast" is my word).

Keep in mind, nothing goes straight up. Gold will correct, and I suspect I'll encounter plenty of frustration waiting for my gold miners to overtake the metal itself. But as you've read me put it before, nothing has happened to make me even begin to regret my gold and gold mining holdings.

I think that will be the case for a very long time to come. So get used to it. ;-)

Comments

[Simon]

Thank you for your blog. It is one of the sites I always check everyday. Anyways, I'm wondering if you would recommend GDX at this price for anyone not in gold mining shares yet. If not, would you wait for a correction?

[John]

@Simon: Thanks for your kind words about the blog. Marc Faber was on Bloomberg TV the other day saying he'd average in to gold over time. Sounds like good advice to me. We'll almost certainly have a correction at some point, but following Faber's advice might be the best way to play gold.